Drone software company SkySpecs makes acquisitions as focus on wind power increases - Crain's Detroit Business

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A pair of recent international acquisitions for Ann Arbor software firm SkySpecs Inc. positions the company to bolster its presence in the expanding area of clean energy — specifically, wind power.

Within the last month, SkySpecs — which makes software for drones to inspect wind power infrastructure — has closed on the acquisitions of Fincovi, an Irish financial software company, and Vertikal AI, a Danish company focused on predictive maintenance for wind infrastructure.

Terms of the deals were not disclosed.

SkySpecs CEO Danny Ellis told Crain's in an interview last week that the acquisitions position the company to bring together data and maintenance for wind farm owners and operators.

"Tying all that together gives us the complete ecosystem of every component of the wind farm, and tying it into the full picture of finance," Ellis said.

With the acquisitions, SkySpecs now serves customers in 26 countries and has offices in Ann Arbor, The Netherlands, Ireland, Denmark and India.

Ellis declined to provide a revenue figure for the company.

The thesis behind the deals, according to Ellis, is to help those owning and operating wind farms best understand their options in everything from repair of equipment to investing in new turbines.

"Trying to help paint that picture, and close that feedback loop," Ellis said. "So when issues are identified, it's not just constant running around trying to fix stuff, but it's actually building out a predictive maintenance plan, from development through end-of-life of a farm."

Ray O'Neill, CEO of Fincovi, said in a statement: "There is an incredible opportunity to integrate operating data with financial data to provide better insight into asset investment. Our team can't wait to combine our capabilities to help wind farm owners decide how to invest their next dollar."

Allan Larson, the CEO of Vertikal AI, added: "We use data analytics and applied AI to optimize the real-time health of wind turbines. Joining with SkySpecs will enable us to deliver our predictive maintenance software to the market — at scale — for the greatest performance impact with wind producers."

Founded in 2012, SkySpecs has raised about $40 million to date. The most recent round of just more than $10 million — closed in March and led by McRock InFund LP out of Toronto and other existing investors — allowed the company to move forward with the acquisitions, as well as continue growing its headcount, which now stands at about 120 and could grow another 20 percent by year's end, Ellis said.

The expansion of SkySpec's business also comes amid a large push by the Biden administration for enhanced focus on wind power and other clean energy.

In late March, the administration announced "a set of bold actions that will catalyze offshore wind energy, strengthen the domestic supply chain, and create good-paying, union jobs," according to a statement.

Ellis told Crain's that it's unclear at this point the extent to which such government policies could bolster SkySpecs. What is clear, he said, is with increasing demand for wind power, there's also a shortage of people to help with the work.

"We're really trying to ... accelerate that growth with the same number of people in the current industry, but bring in digitalization and robotic capabilities to help them move faster, move more consistently and more repeatedly in the industry," Ellis said.

Jim Adox, a SkySpecs board member and managing director in the Ann Arbor office of venture capital firm Venture Investors, said his involvement with the company dates to late 2015 when the fund led a nearly $3.7 million Series A funding round.

Adox noted that initial investment came during a time when SkySpecs was a very different company than it is today.

"Initially, we invested in a drone inspection company focused on wind," he said. "Now we're invested in a wind asset management company, which drones are a part of. So the size of the opportunities has grown dramatically."

As wind power becomes accepted, some unusual players are also getting into the sector.

In April, the venture capital arm of oil giant Chevron Corp. had made an investment of an unknown size into Ocergy Inc., a Carson City, Nev.-based offshore wind turbine company, Bloomberg reported.

"To my knowledge, this is the first investment by a U.S. oil major in offshore wind," Anthony Logan, a senior analyst at Wood Mackenzie Ltd., told Bloomberg.

Floating wind turbines will become important as the U.S. electrical grid increasingly depends on offshore wind power, Logan said.

"If you can get into those deeper waters, chances are you can build a system of offshore wind production that isn't vulnerable to low wind or no-wind events," Logan said.

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